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>That new money is spent into the system and much of it takes the form of bank deposits which can then be inflated 10:1. And the problem with this is? Canada
by compcoffee 8y ago
>That new money is spent into the system and much of it takes the form of bank deposits which can then be inflated 10:1.
And the problem with this is?
Canada has no reserve requirement. The US value of reserves in the financial system is so high that banks are no longer reserve constrained.
The absolute quantity of money doesn't matter; the supply and demand for the currency does. That's why so many people got it wrong by claiming Quantitative Easing would result in massive inflation.